•Again, House tackles oil corporation on revenue remittances
Chika Amanze-Nwachuku, Alike Ejiofor and Onwuka Nzeshi with agency report
The Nigerian National Petroleum Corporation (NNPC) and Exxon Mobil Corporation’s local unit in Nigeria, Mobil Producing Nigeria Unlimited (MPNU), plan to tap the bond market in 2016 as an alternative source of funding for their Joint Venture (JV) operations.
The move, according to sources at the corporation, was aimed at filling the shortfall in funds, which has been a major challenge facing the JV operations.
NNPC’s Finance Director, Mr. Bennard Otti, was quoted in a report on the corporation’s website as saying that the NNPC’s management was meeting with its Exxon counterpart on alternative sources of funding, such as bond markets to enhance revenue.
The plan to consider the bond market for raising funds came just as the House of Representatives engaged the NNPC over its seeming refusal to remit its surplus revenue to the Consolidated Revenue Fund as prescribed by law.
Mobil Producing Nigeria’s (MPN) Chief Financial Officer, Segun Banwo, who confirmed the development in a statement on the NNPC’s website, explained that the JV partners would continue to use the external financing option from 2013 to 2015, but would switch to the bond market by 2016.
“The challenge of today is that a lot of people are going into the bank market, and the avenue is being crowded, making it difficult for us to obtain sufficient funding,” Bloomberg quoted Banwo to have said in the statement on the corporation’s website.
He added: “From the years 2013 to 2015, we will continue to use the external financing option, but by the year 2016, we would switch to the bond market.”
Exxon Mobil, the second-largest oil producer in Nigeria, is the operator of a joint venture in which it holds a 40-per-cent stake, with NNPC holding the rest. The company has a daily output capacity of about 550,000 barrels of crude from 90 offshore platforms and about 300 oil wells, the Bloomberg reported.
Exxon said last year that it concluded a $1.5 billion financing arrangement with NNPC, with a $900 million loan sourced from a group of Nigerian and international banks.
Last year, the Managing Director of MPN, Mr. Mark Ward, had disclosed that Mobil and NNPC were seeking $1.5 billion loan to fund a drilling campaign jointly held offshore oil fields in Nigeria.
“We are finalising details on this (loan). It is to fund the drilling campaign in 2012 in our joint venture fields,” Ward had said at an energy forum in Abuja.
Although the Mobil boss did not give details of the funding arrangement, officials of the NNPC had confirmed then that the JV partners were in talks with international lenders, including BNP Paribas, Standard Bank and Standard Chartered in view of galvanising fund for the offshore JV operation.
Meanwhile, the House of Representatives once again, rebuked the NNPC yesterday for its seeming unwillingness to remit its surplus revenue to the Consolidated Revenue Fund as prescribed by law.
Chairman of the House Committee on Finance, Hon. Abdulmumin Jibrin, accused the NNPC of deliberately employing delay tactics to evade complying with the provisions of the Fiscal Responsibility Act 2007.
Jibrin explained that the exercise was no longer limited to the NNPC but must be extended to its subsidiaries that are generating the revenue and have been making profit without remittance to the Consolidated Revenue Fund.
He said out of the 17 subsidiaries of NNPC, only five were not making profit and the House would want to know how the profit of the others were being spent.
“It is the opinion of this committee that the wrong impression the NNPC is having is that they forgot that the committee is constitutionally empowered to request for documents to aid its investigation from any entity considered necessary.
“We can decide to request for information even from a unit within the NNPC and they must oblige as stipulated by the constitution,” he said.
Jibrin observed that NNPC had never remitted a kobo to the federal government, while some ministries, departments and agencies (MDAs) had complied with the law by remitting a good percentage of their earnings to government’s account.
“We calculated from 2009, and realised that NNPC generated over N6 trillion. We have always tried to get NNPC for some explanations, but they would not show up. It took a bench warrant to get the Group Managing Director (GMD – Andrew Yakubu) to appear before the House, and when he did, he told us the usual story that NNPC has been operating at a loss,” Jibrin said.
But Otti, who appeared before the committee along with other NNPC officials, denied the allegations, saying the corporation was not games.
Otti reiterated before the committee that NNPC had been operating at a loss, which he said had worsened due to leakages occasioned by pipeline vandalism.
He apologised for the delay in complying with the law and pledged that the NNPC was prepared to open its books for scrutiny